The Federal Deposit Insurance Corporation seized the assets of Silicon Valley Bank on Friday, marking the largest bank failure since Washington Mutual during the height of the 2008 financial crisis.

The FDIC ordered the closure of Silicon Valley Bank and immediately took position of all deposits at the bank. The bank had $209 billion in assets and $175.4 billion in deposits as the time of failure, the FDIC said in a statement. It was unclear how much of deposits was above the $250,000 insurance limit at the moment.

Silicon Valley was heavily exposed to tech industry and there is little chance of contagion in the banking sector as a whole, with major banks holding sufficient capital to avoid a similar situation.

The financial health of Silicon Valley Bank was increasingly in question this week after the bank announced plans to raise up to $1.75 billion in order to strengthen its capital position amid concerns about higher interest rates and the economy.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

The banking sector is in retreat, as it has been all week, as the effects of the Federal Reserve’s fight against inflation begins to weigh heavily on a small number of banks that cater to the tech sector.

Late Thursday, SVB Financial Group, the parent of Silicon Valley Bank, lost 60% of its value after announcing plans to raise up to $1.75 billion in order to strengthen its capital position amid concerns about higher interest rates and the economy. Major financial institutions like Bank of America, Citigroup and JPMorgan were not immune, falling between 4% and 6%.

That sell-off continues before the opening bell Friday. Silicon Valley plunged sharply and was extraordinarily volatile before trading was halted. The banking sector is leading all others in declines.

Driving anxiety in the sector is the fight by the U.S. Federal Reserve against inflation.

As the Fed raises its benchmark interest rate, the value of bonds, typically a stable asset, are starting to fall. That is not typically a problem as the declines lead to “unrealized losses,” or losses that are not counted against them when calculating the capital cushion than banks can use should there be a downturn in the future.

However, when depositors grow anxious and begin withdrawing their money, banks sometimes have to sell those bonds before they mature to cover the exodus of deposits.

“We envision a need for another large-scale sale of securities from its (held-to-maturity) portfolio, if rates move materially higher than the current forward curve implies,” Raymond James analyst David Long said about SVB in a note to clients.

Larger banks do not face the same level of threat, but the falling value of bonds can impact their margins. That has helped drive the sector lower this week.

Diversified banks like Bank of America and JPMorgan pulled out of an early slump due to data released Friday by the Labor Department, but regional banks, particularly those with heavy exposure to the tech industry, were in decline.

Yet it has been a bruising week. Shares of major banks are down this week between 7% and 12%.